We don’t know if Hoonigan, the company that catapulted the late Ken Block to fame, had foreseen the billion-dollar debt it currently has coming, as the brand itself confirmed in a recent statement. Under the title “Hoonigan announces a strategic transaction to strengthen its financial base and support long-term growth”, they hint that the next few months will be decisive in the future of the brand.
Founded in 1996 by Randy White and Jody Groce, the company has focused on pushing the boundaries of style, performance and innovation in the automotive aftermarket. From wheels and tires to suspensions and lighting, it has a broad portfolio of recognized brands that have sustained the company throughout the years.
In 2010 they partnered with the late exhibition pilot Ken Block, founding Hoonigan Racing Divisiona racing team that has participated in the FIA World Rallycross Championship since 2014, and before that, in the World Rally Championship, the FIA European Rallycross Championship and the Global Rallycross Championship.
Hoonigan’s recovery requires $600 million in funding
The statement issued by Hoonigan leaves no room for doubt as to its current financial situation: “The Company has entered into a Restructuring Support Agreement (“RSA”) with the majority of its debtholders through which it expects to eliminate approximately $1.2 billion of the Company’s debt and secure up to approximately $570 million of new equity, substantially improving the Company’s balance sheet and financial position.”
Vance Johnston, CEO of Hoonigan, says: “Today’s announcement marks a significant step forward for Hoonigan, which will allow us to advance our leadership position in the growing automotive aftermarket sector. With a significantly strengthened balance sheet and new capital, this transaction will position us to invest in innovation and further drive financial performance. With the strong support of our financial partners, we remain focused on delivering cutting-edge products and best-in-class service to our partners throughout this process.”
In order to deal with this situation, Hoonigan has introduced “voluntary petitions for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware (the “Court”). As contemplated in the RSA, the Company expects to emerge from bankruptcy (within two months) under the majority ownership of a group of its current lenders, who recognize the potential of the automotive aftermarket industry and are confident in Hoonigan’s ability to continue to operate at the forefront.”
